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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 14957 / June 20, 1996
SEC v. Alvis B. Rutland, Scofield Berthelot, William D. Cornett,
Howard W. Jones, and Gerard A. Spataro
(S.D. MS, Civil Action No. 1:93-CV-94 BrR)
The Securities and Exchange Commission announced today that
on June 7, 1996, the Honorable David C. Bramlette III, U.S.
District Judge for the Southern District of Mississippi, entered
an order holding Gerard A. Spataro ("Spataro") in contempt for
failing to pay disgorgement in the amount of $63,000, along with
prejudgment interest, as previously ordered by the Court on June
17, 1994. The Court ordered Spataro to pay the disgorgement and
prejudgment interest within 30 days of the date of the June 7,
1996 order.
On September 24, 1994, the Commission filed a motion for an
order to show cause why Spataro should not be held in contempt
for failing to pay the $63,000 disgorgement as ordered by the
court. In response to the Commission's motion, the Court entered
an order on December 22, 1994, directing Spataro to show cause in
writing, no later than January 3, 1995, why the Court should not
hold him in contempt for non-payment of the disgorgement.
Spataro neither responded to the Court's Order to Show Cause nor
did he pay the disgorgement.
In its complaint, the Commission alleged that, from January
1990 to May 1991, Spataro participated in a scheme to mislead
investors by representing to the investors that he and others had
obtained agreements with the Peruvian government and at least two
international banks to encash or purchase 1875 Peruvian bonds.
In fact, no such agreements existed. The bonds were considered
unredeemable by the Peruvian government.
On June 9, 1993, the Court entered an order of Permanent
Injunction and Other Relief against Spataro from violating the
antifraud provisions of the securities laws alleged in the
complaint. On June 17, 1994, Judge Bramlette ordered Spataro to
pay disgorgement in the amount of $63,000, plus prejudgment
interest, which represented his proceeds from the scheme and
which has not been paid.
See also, L.R. 13601 (April 14, 1993), L.R. 13692 (July 1,
1993), and L.R. 14332 (November 15, 1994).